Sylvamo Enters Put Option Agreement for Europe Business

The Tip Desk · November 12, 2026 · 4 min read

Continuing-operations net income was $85 million, or $2.13 a share, after a $284 million discontinued-operations loss tied to a Europe impairment.

Sylvamo Corporation (SLVM), the Memphis-based paper maker, entered a put option agreement with Midas Atlantic Partners, in partnership with The Najafi Companies, for a binding offer to acquire its Europe business, including uncoated freesheet mills in Saillat, France and Nymolla, Sweden, plus forestry and supporting operations.

The company said the proposed sale would make it a more focused company concentrated in Latin America and North America. Europe is now reported as discontinued operations, and prior periods were recast. Net sales of European operations were $178 million in the third quarter of 2026. Discontinued operations reported a $284 million loss, primarily driven by a noncash impairment charge. Continuing operations include about $6 million to $7 million per quarter of corporate costs previously allocated to Europe.

From continuing operations, net sales were $645 million, up from $614 million in the second quarter of 2026. Net income from continuing operations was $85 million, or $2.13 a share, a 13% margin, versus $2 million, or $0.05 a share, in the second quarter. Adjusted operating earnings from continuing operations were $53 million, or $1.33 a share, versus $14 million. Adjusted EBITDA from continuing operations was $128 million, a 20% margin, versus $66 million and an 11% margin.

The company said price and mix improved by $25 million versus the second quarter, primarily from previously communicated paper price increases, while volume was relatively flat. Operations and other costs were favorable by $6 million from improved operational performance. Planned maintenance outage costs were $38 million lower, as expected. Input and transportation costs were unfavorable by $6 million, primarily due to higher transportation costs.

Latin America sales were $258 million, and the segment swung to a $22 million operating profit from an $18 million operating loss in the second quarter. The company said earnings were higher due to lower planned maintenance outages, higher sales price and mix, higher volumes and lower operating costs, slightly offset by higher input costs. Latin America adjusted EBITDA was $47 million, an 18% margin, versus $6 million and a 3% margin.

North America sales were $414 million and operating profit was $65 million, versus $411 million of sales and $46 million of operating profit. The company said earnings were higher due to lower planned maintenance outages, higher sales price and mix and lower operating costs, partially offset by lower volumes and higher input costs. North America adjusted EBITDA was $81 million, a 20% margin, versus $60 million and a 15% margin.

Cash provided by operating activities from continuing operations was $70 million, and free cash flow was $16 million, versus $42 million of operating cash and negative $16 million of free cash flow in the second quarter. The company declared a dividend of $0.45 a share, paid Oct. 16.

The reported effective tax rate from continuing operations was (20)%, compared with 88% in the second quarter. The third-quarter rate was primarily driven by a $36 million tax benefit related to the investment in European subsidiaries; the second-quarter rate was primarily driven by a $12 million valuation allowance. The effective operational tax rate was 30% in both quarters. Net special items related to continuing operations were a net after-tax benefit of $33 million, or $0.83 a share, compared with a net after-tax charge of $13 million, or $0.33 a share, in the second quarter.

At the Eastover mill, the company said the paper machine optimization project remains on schedule and within budget and will add 60,000 short tons of uncoated freesheet capacity annually. It decided to keep three existing cutsize sheeters and add a new sheeter that will add about 200,000 short tons of cutsize converting capacity, with startup expected early in the third quarter of 2027. The woodyard softwood line and warehouse expansion remain on track to start in the first quarter of 2027.

In Latin America, the company said demand is seasonally stronger in the second half of the year. In September, Colombia canceled antidumping duties on uncoated freesheet imports from Brazil, which it said restores access to a market it previously served. In North America, it said the industry supply and demand balance remains healthy and paper price increases are mostly implemented. Imports in both regions continue to increase year over year. Supply chain pressures, including higher fuel costs, diesel prices, reduced driver availability and persistently high oil prices, are driving higher input and transportation costs.

Chief Executive Officer John Sims said the proposed sale of the Europe business will make Sylvamo a more focused company, concentrated in Latin America and North America, where the company sees the greatest opportunities to create value. He said Eastover strategic investments are progressing, the lean transformation is improving performance across mills, and the company will continue to invest in low-risk, high-return projects in uncoated freesheet, maintain a strong balance sheet and return cash to shareowners.